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Facebook Robocall Case Gives Justices Shot to Define Autodialer

Oct. 28, 2019, 10:31 AM

Facebook Inc.'s U.S. Supreme Court challenge of a lower court ruling it can be sued for violating the federal robocall law gives the justices the chance to specify what kind of technology businesses can use to make such calls.

Facebook wants the high court to review a U.S. Court of Appeals for the Ninth Circuit ruling allowing a lawsuit against it under the Telephone Consumer Protection Act, because the plaintiff showed the social network used an autodialer to alert him of suspicious attempts to access his account.

U.S. courts haven’t agreed about what constitutes an autodialer since at least March 2018, when the U.S. Court of Appeals for the District of Columbia Circuit struck down the Federal Communications Commission’s definition in ACA International v. FCC. Social networks, debt collectors, retailers, and other companies have been left to wonder whether their robocalls are breaking the law.

“In this day of online businesses, it’s hard to communicate with customers when your calls and texts might be permissible in one jurisdiction but not in another,” Michelle Cohen, who heads Ifrah Law’s data privacy and cyber security practice group, said.

The TCPA restricts the use of autodialers, also called automatic telephone dialing systems (ATDS), to call or text consumers.

Facebook doesn’t deny sending texts, only that it didn’t use an autodialer. The Ninth Circuit said the company did use an autodialer because its equipment automatically dialed numbers stored in a database.

The Supreme Court hasn’t scheduled the case for conference.

What’s in a Term?

Facebook argues that the high court should define the scope of “autodialer” so businesses and consumers can see whether they’re running afoul of the law. The Ninth Circuit’s interpretation is too broad and could outlaw calls to numbers from any smartphone contacts list, the company says.

“Americans deserve to know whether they have been inadvertently toting ATDSs around in their pockets and purses and risking $1,500-a-call fines,” Facebook wrote in its Oct. 17 petition. Supreme Court review, it said, would “provide much-needed clarity and restore uniformity to courts and potential litigants across the nation.”

In the absence of FCC guidance, federal district and appellate courts, often within the same circuit, have disagreed over whether “autodialer” covers devices that call or text selected numbers but aren’t configured to dial at random.

Courts in 38 cases since March 2018 have ruled that devices must be able to dial random or sequential numbers to be autodialers, an analysis of Bloomberg Law data shows. In another 28 cases, courts found devices that call numbers stored in a list can be autodialers even if they can’t randomly dial.

The Supreme Court “could bring finality to this ongoing split over the statutory definition that’s at the heart of the TCPA,” Artin Betpera, a partner at Womble Bond Dickson in Orange County, Calif., whose practice focuses on the robocall law, said.

Facebook also wants the justices to decide whether the entire law is unconstitutional. The company had argued that a debt-collection exemption to the autodialer restrictions distinguishes speech by content and violates the First Amendment.

Courts Divided

Autodialers are defined in the TCPA as devices with the capacity “to store or produce numbers to be called, using a random or sequential number generator; and to dial such numbers.”

The FCC, in a 2015 order, interpreted that definition to include devices that can be altered to produce or dial random numbers. The D.C. Circuit said in ACA International the agency’s interpretation was overly broad and could sweep in everyday smartphones, vacating the commission’s order.

Since then, “there has been ruling after ruling in which courts have grappled with the term autodialer,” Betpera said. Unless Congress intervenes, “a Supreme Court decision likely will set the standard for the country,” he said.

Various cases highlight the confusion. Yahoo! Inc. escaped a robocall suit in June 2018, when the U.S. Court of Appeals for the Third Circuit ruled in Dominguez v. Yahoo Inc. that the plaintiff failed to show that Yahoo’s calling system had a present capacity to send texts randomly or sequentially.

Three months later, fitness company Crunch San Diego LLC wasn’t as fortunate. The U.S. Court of Appeals for the Ninth Circuit ruled in Marks v. Crunch that the company’s marketing system could be an autodialer because evidence showed it sent texts to a stored list of numbers. The Ninth Circuit pointed to Marks in finding Facebook’s dialing system could be an autodialer.

Critics say the Ninth Circuit’s rulings are too broad—much like the FCC interpretation that was struck down. The court “substantially expands the scope of the statute in a way that the D.C. Circuit said is impermissible,” Ian C. Ballon, a Greenberg Traurig LLP internet attorney who represented Crunch, said. Crunch appealed to the Supreme Court, but both parties agreed to dismiss the case after reaching a settlement.

While courts wrangle over defining autodialers, the FCC has yet to come up with a new interpretation. A year ago, the agency asked for additional public comment in the wake of Marks, but it’s unclear when the process will wrap up.

A new FCC order is unlikely to settle matters because it too could face a legal challenge, Cohen said. Courts also may not know how closely to follow the agency’s interpretation, given that the Supreme Court in June punted the issue of agency deference in PDR Network LLC v. Carlton & Harris Chiropractic Inc., a case involving the definition of an unsolicited fax advertisement.

The Supreme Court must nail down the definition of autodialer if it hears the case, Cohen said. If it issues a ruling that “leaves open the door in some manner,” such as to account for future technology, judges may still find themselves grappling with which calling technologies fit under the law, she said.

The case is Duguid v. Facebook Inc., 9th Cir., No. 17-15320, petition for review filed 10/17/19.

To contact the reporter on this story: Alexis Kramer in Washington at akramer@bloomberglaw.com

To contact the editors responsible for this story: Melissa B. Robinson at mrobinson@bloomberglaw.com; Rebecca Baker at rbaker@bloomberglaw.com; Keith Perine at kperine@bloomberglaw.com

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